Serbian central bank keeps key policy rate unchanged

Serbia’s central bank has decided to keep its key policy rate unchanged, a press release said on Thursday.

The board of the National Bank of Serbia (NBS) has decided to keep the key policy rate at the level of 3 percent primarily bearing in mind expected inflation trends and the effects of the easing of monetary policy, the press release said.

“The inflation trend is within the 3 percent target limits,” it said adding that base inflation has been at a low of around 0.8 percent year-on-year and with low inflationary expectations in the financial sector and economy.

“The board felt that economic growth is speeding up with the high contribution of investments which will support diversified growth and the export oriented segments of the economy. The rise in investments is supported by favourable financial conditions and a growth of credit activity along with more foreign direct investments which have covered the balance of payments current account deficit and contribute to its reduction in the medium term,” the NBS said.

The NBS warned that caution in monetary policy is still needed, primarily because of uncertainty on the international goods and financial markets.

The NBS said that its board would meet again on August 9 to discuss the key policy rate.